Credit Cards-A Friend or a Foe?

Do you have a credit card? Well, if you do, your just one of the millions of people around the world who wants to avail the advantages of having one.

A credit card is a piece of plastic card that can be used to purchase goods and services. It looks like an ATM, usually with your name and card number inscribed on it. The only difference between the two is that credit cards can be used for buying things based on the sole promise of the holder to pay his debts under an agreed terms and conditions. You can buy as much as you want until you reach your credit limit within a month. Credit limit is the maximum allowed debt in a given month. Credit limit varies depending on the type of credit card (Classic, Premiere, etc) and also varies depending on the paying capacity of the person applying for it.

Credit Card Advantages

Credit card makes money transactions a lot more convenient. You don’t have to bring a lot of cash. All you need is to present your credit card on merchants that accept it. They will just swipe it on their machines and in the split of a second, the item is already yours. The cost of the item will automatically be reflected to your account. You’ll just have to pay it at a specific date of the month.

Another benefit of having a credit card is that it can be used in online shopping in the internet. Most airlines are capable of online booking so you don’t have to go to their sales office to purchase airplane tickets. Also, the popularity of online shopping like Amazon, eBay, and many other e-commerce websites are growing. On all these, credit cards can be used to transact online.

For emergency situation where you need immediate cash, you can do cash advance on the nearest ATM machine that supports the credit card you have. Visa and MasterCard are two popular credit card payment services that can be found almost everywhere around the globe.

Credit Card Dangers

The only disadvantage of having a credit card lies on its potential dangers. Most of these however, depend on the holder’s attitude. One of these is overspending. The “huge” purchasing freedom provided by having a credit card can be a trap to everyone especially if you are not a disciplined person. Many who fell on this snare found themselves covered in deep layers of debts until the point that they cannot manage it anymore. They cannot anymore bear the debts that are increasing every month due to the high interest rate.

Also, take care of your credit card. Stolen credit cards can be used to purchase goods and services charged in your name. This is not limited to physical stealing but also information stealing through the internet. There are many ways that were invented by cyber criminals to hack information about you like your credit card number and PIN. With this and other information, they can use your credit card to purchase for themselves.

On all these disadvantages, there are still ways to minimize the risk. With regards to overspending, the solution is to practice discipline. On the security risk, the solution is being vigilant. Transact only on your trusted vendors whether online or not.

Credit Card: Friend or Foe?

The answer to this question depends on the person. Examine yourself first before deciding to have one.